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Oil in the gulf, profit loss?

innomen
Posts: 10,052
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5/24/2010 1:20:13 PM
Posted: 6 years ago
So, I'm a business guy, i understand a P&L sheet and know a few things about doing what you have to do to make a profit. Sometimes ethics can be a pesky little problem, and each according to his conscience.

So, I'm thinking that if i had a very large asset at the bottom of the ocean that was in jeopardy i might do what i can to minimize the loss and try and retain any possible revenue that might offset the expenses that are being incurred as a result of the mishap in one of our wells. Obviously it is clear that something needs to be done, but what if priority is given to retaining some of the asset? Would it not make sense from a business perspective to address the situation first with all solutions that might allow future exploitation of the well, as ineffective as they might be compared to a more permanent solution? Any measure that would permanently prevent the asset from being obtained might be a secondary, or last approach.

Possible?
Volkov
Posts: 9,765
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5/24/2010 1:25:16 PM
Posted: 6 years ago
They are attempting to siphon the gas, but the first priority is to contain the leak so it doesn't get out of their reach and muck up the shores and drive popular opposition against them.

I believe the plan has been the entire time to cap it, then work to siphon it. The "top hat" thing was just a giant cap with a pipe leading back up to the surface for oil extraction, you know.
innomen
Posts: 10,052
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5/24/2010 1:39:57 PM
Posted: 6 years ago
At 5/24/2010 1:25:16 PM, Volkov wrote:
They are attempting to siphon the gas, but the first priority is to contain the leak so it doesn't get out of their reach and muck up the shores and drive popular opposition against them.

I believe the plan has been the entire time to cap it, then work to siphon it. The "top hat" thing was just a giant cap with a pipe leading back up to the surface for oil extraction, you know.

I understand what they are attempting to do, i just question their strategy. I also am unsure why the US hasn't sent any sort of team to address the problem. The well represents a giant asset, and it could turn to a giant loss for BP. It has been my experience in some business decisions to minimize the loss and preserve the asset at all cost. Isn't it a little odd that we aren't involved a little more directly? Is it possible that the strategy may be to maintain the asset? Is it possible that any viable solution that would completely nullify any hope of retaining any of the asset is not being considered?
Volkov
Posts: 9,765
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5/24/2010 1:46:19 PM
Posted: 6 years ago
At 5/24/2010 1:39:57 PM, innomen wrote:
I understand what they are attempting to do, i just question their strategy. I also am unsure why the US hasn't sent any sort of team to address the problem. The well represents a giant asset, and it could turn to a giant loss for BP. It has been my experience in some business decisions to minimize the loss and preserve the asset at all cost. Isn't it a little odd that we aren't involved a little more directly? Is it possible that the strategy may be to maintain the asset? Is it possible that any viable solution that would completely nullify any hope of retaining any of the asset is not being considered?

That's possible and probable. However, as to why the US isn't coming in there guns-ablazing - if they don't, then BP takes most of the responsibility. It is their well, after all. The US can do its best to keep it off the shores and try to minimize the impact, but the failure to cap and control it would fall directly on BP, which I suspect is something the US and the states (and the prosecutors who will be suing BP for damages) want to happen. That way state(s) can say, we stayed out of it, and we told BP to get their mess cleaned up, and they failed, so lets go get 'em.
innomen
Posts: 10,052
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5/24/2010 1:51:40 PM
Posted: 6 years ago
At 5/24/2010 1:46:19 PM, Volkov wrote:
At 5/24/2010 1:39:57 PM, innomen wrote:

That's possible and probable. However, as to why the US isn't coming in there guns-ablazing - if they don't, then BP takes most of the responsibility. It is their well, after all. The US can do its best to keep it off the shores and try to minimize the impact, but the failure to cap and control it would fall directly on BP, which I suspect is something the US and the states (and the prosecutors who will be suing BP for damages) want to happen. That way state(s) can say, we stayed out of it, and we told BP to get their mess cleaned up, and they failed, so lets go get 'em.

I think (i could be wrong) the maximum liability for BP is 75 Million, and i am pretty sure they already surpassed that.
Volkov
Posts: 9,765
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5/24/2010 1:52:33 PM
Posted: 6 years ago
At 5/24/2010 1:51:40 PM, innomen wrote:
I think (i could be wrong) the maximum liability for BP is 75 Million, and i am pretty sure they already surpassed that.

They've been trying to repeal that law, and sue for a lot more. I'm not sure if they have already or not, but it doesn't look as if it'll be stopped.
innomen
Posts: 10,052
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5/24/2010 1:56:37 PM
Posted: 6 years ago
At 5/24/2010 1:52:33 PM, Volkov wrote:
At 5/24/2010 1:51:40 PM, innomen wrote:
I think (i could be wrong) the maximum liability for BP is 75 Million, and i am pretty sure they already surpassed that.

They've been trying to repeal that law, and sue for a lot more. I'm not sure if they have already or not, but it doesn't look as if it'll be stopped.

Then it becomes political. If the company (which i think reported something like 4 Billion in profit last year, maybe more) were to have complete responsibility in paying for the losses the company could be in jeopardy, and something like that would have great implications.
mattrodstrom
Posts: 12,028
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5/24/2010 1:57:21 PM
Posted: 6 years ago
At 5/24/2010 1:52:33 PM, Volkov wrote:
At 5/24/2010 1:51:40 PM, innomen wrote:
I think (i could be wrong) the maximum liability for BP is 75 Million, and i am pretty sure they already surpassed that.

They've been trying to repeal that law, and sue for a lot more. I'm not sure if they have already or not, but it doesn't look as if it'll be stopped.

i would hope such things fall under the no Ex-Post Facto provision.

also... I heard that they'd prolly pay far over the minimum b/c they wouldn't want ill-will from the congress or from customers (who would have then paid more in taxes)
"He who does not know how to put his will into things at least puts a meaning into them: that is, he believes there is a will in them already."

Metaphysics:
"The science.. which deals with the fundamental errors of mankind - but as if they were the fundamental truths."
Volkov
Posts: 9,765
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5/24/2010 2:00:04 PM
Posted: 6 years ago
At 5/24/2010 1:56:37 PM, innomen wrote:
Then it becomes political. If the company (which i think reported something like 4 Billion in profit last year, maybe more) were to have complete responsibility in paying for the losses the company could be in jeopardy, and something like that would have great implications.

I have some doubt that the government would sue for an amount that would cripple BP - but they would be looking for blood. $75 M isn't blood, it's a scratch.

And of course it's political. Things rarely end up being non-political these days, especially with such a large scale disaster.
innomen
Posts: 10,052
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5/24/2010 2:02:09 PM
Posted: 6 years ago
I was thinking political between the countries involved. BP is a British company and crippling it would have a certain fallout internationally.
Volkov
Posts: 9,765
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5/24/2010 2:05:02 PM
Posted: 6 years ago
At 5/24/2010 2:02:09 PM, innomen wrote:
I was thinking political between the countries involved. BP is a British company and crippling it would have a certain fallout internationally.

Oh, lol, maybe. Just because its British doesn't mean Britain will stand up for it. Especially considering that such a position would hurt the nubile coalition government, half made up with fuzzy enviro-concerned Liberals.
innomen
Posts: 10,052
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5/24/2010 2:07:37 PM
Posted: 6 years ago
At 5/24/2010 2:05:02 PM, Volkov wrote:
At 5/24/2010 2:02:09 PM, innomen wrote:
I was thinking political between the countries involved. BP is a British company and crippling it would have a certain fallout internationally.

Oh, lol, maybe. Just because its British doesn't mean Britain will stand up for it. Especially considering that such a position would hurt the nubile coalition government, half made up with fuzzy enviro-concerned Liberals.

I actually don't think anyone is looking that far down the line. I think that BP is figuring the best approach that will cost them the least amount of money, or possibly retain the asset, and i believe the white house is looking the other way.